Country Meeting Report on

Trade Consignment Mapping for Better Regional Connectivity in

South Asia

Organized by:

UnnayanShamannay

20 October 2014

Conference Hall, UnnayanShamannay

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Country Meeting on

Trade Consignment Mapping for Better Regional Connectivity in

South Asia

1. Introduction

1.1 Country meeting of the project “Trade Consignment Mapping for Better Regional

Connectivity in South Asia” was organized by Unnayan Shamannay at its Conference Hall,

Dhaka on October 20, 2014. The objective of the meeting was to validate research findings on

trade route Kathmandu-Dhaka via Banglabandh Land Customs Station by stakeholders involved

and gather specific recommendations for future course of action.

1.2 More than 50 participants attended the meeting.Mr. Suhel Ahmed Chowdhury, Former

Secretary, Ministry of Commerce, Government of Bangladesh was the Guest of Honor in the

meeting. Representatives of Ministry of Commerce, Bangladesh Land Port Authority, Chamber

of Commerce, Truck and Covered Van Owners’ Association, Private organizations trading in

India and Nepal, different development organizations and media were also present.

1.3 The meeting started with the welcome remarks by the Chair, Prof. Dr. AK Enamul

Haque, Department of Economics, East West University. Project overview was presented by Mr.

Prithviraj Nath, Policy Analyst, CUTS International, India, along with some recommendations

followed by the keynote presentation of Dr. Mahfuz Kabir, Senior Research Fellow, Bangladesh

Institute of International and Strategic Studies (BIISS), Dhaka. Mr. Suhel Ahmed Chowdhury,

Mr. Manzur Ahmed, Advisor, FBCCI, Bangladesh and Mr. Asjadul Qibria, Business Page

Editor, daily Prothom Alo, Bangladesh discussed on the keynote presentation. The session ended

with open discussion with active participation of the participants.

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2. Project Background:

Poor regional connectivity is believed to be one of the vital constraining factors for limited trade

and regional integration within the South Asia. The project “Trade Consignment Mapping for

Better Regional Connectivity in South Asia” (TCMSA) implemented by CUTS International

with support from The Asia Foundation, tries to delve into the dynamics of three important trade

routes in South East Asia including Bangladesh, India, Nepal and Pakistan. Unnayan Shamannay

conducted primary and secondary research for Kathmandu-Kakarvitta/Panitanki LCS-

Phulbari/Banglabandh LCS-Hatikumrul-Dhaka trade corridor in order to identify infrastructural

lacking, procedural issues, regulatory framework, operational inefficiencies and measures for

better regional connectivity.

3. Issues Raised in the Meeting:

As this corridor is allows connectivity with not only Nepal but also with Northeast India, the

following broad issues were discussed in the meeting:

Major cargo transport and transit constraints faced by traders in the mentioned route.

Additional cost of doing trade arising from the existing infrastructural conditions and

regulations regarding trade related services in selected cross-border trade corridors.

Necessary policy and practice changes, which are required to enhance the efficiency of

selected cross- border trade corridors and reduce the cost of trade.

Possible measures need to be taken considering all hindrances faced by traders.

More specifically, the following issues were raised by the distinguished discussants and

participants of the meetings:

3.1 Investment in infrastructureespecially on storage facility, residential and dining facilities

for users, etc. has remained low for Banglabandh LCS. One perspective raised in the meeting in

this regard, was the gradual development of infrastructure as the volume of trade increases

gradually. In other words present low volume of trade limits investment in infrastructure.

However, realizing the potential this trade route holds, recommendation to invest more in

infrastructure to facilitate greater volume of trade was also raised in the meetings. Loading and

unloading cargo at the border among Bangladeshi registered vehicles, Nepali registered vehicles

and Indian registered vehiclesadds to costs and causes delay in movement of cargo. Also laborers

hold significant bargaining power in the process and often call for strike which leads to frequent

shut down of the LCS.

3.2 Another important constraintis the increases cost that arises due to lack of payment

options available for transaction between Nepal and Bangladesh. Operational efficiency at the

customs station is poor and carrying and forwarding agent has greater involvement with customs

authority due to the lack of awareness. Also, EDI facilities are not used in customs to user (C2C)

level and trade often takes place through manual documentation because of the lack of internet

connection. Marketing efforts by Bangladeshi companies in India or Nepal are very poor except

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Pran-RFL Group. Parking facilities for trucks are very limited, which increases time and cost for

cross-border trade.

3.3 Motor Vehicle Agreement although could be beneficial for all the countries involved,

roads and bridges of Bangladesh are not suitable for transporting heavy cargo borne by Indian

trucks.A detailed cost benefit analysis based on the projected volume of trade on the future is

required to quantify the revenue generated from this LCS and investment required to upgrade the

present stock of infrastructure.

3.4 A single window platform would be helpful for traders using this particular LCS.

Product-specific storage facilities (separate storage facilities for perishable and non-perishable

goods) are much needed. Strategies should be developed to promote Mongla Sea Port at

Bangladesh for usage of Nepal’s international trade. Service charge of Mongla Sea Port could be

discounted 50% for this purpose. This of course requires transit agreement among the involved

countries. Transit agreement among South Asian countries can reduce many of the problems

associated with this LCS. However since it is a political decision, advocacy at the policy level

should be conducted.

3.5 Bangladeshi companies lack technical knowledge regarding standards and technical

regulations, which leads to problems related to standards and multiple testing of products.

Possibilities of introducing immigration facilities through this route need to be explored. Since

Banglabandh LCS is operated by a private operator under BOT (Build Operate and Transfer)

modality under Public Private Partnership (PPP), private operator is mainly responsible for

infrastructural investment. Incidence of extortion along the route is very high.

4. Way Forward:

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From the discussion following points were recommended by the distinguished discussants and

participants:

An action matrix detailing the present bottlenecks, agencies/institutions responsible and

possible plan of action, need to be developed which will serve as the basis of advocacy

initiatives of different actors to ensure better regional connectivity.

Motor vehicle agreement and Transit among the involved countries should be pursued.

Old and narrow bridges are required to be modernized and all infrastructural problem

should be resolved by BOT modality.

As the land port authority leased this LCS to private sector on the basis of BOT modality

for 25 years, the scope of upgrading land port infrastructural facilities should be revised

after consultation with respective operation authority.

Harmonization of standards should be developed.

Coordination among the different agencies at the border point needs to be improved

along with establishment of asingle window platform.

Residential and dining facilities for users mainly government officials, truck drivers,

laborers need to be developed.

Immigration/passenger movement via this route must be promoted. Since this issue is

under the jurisdiction of Ministry of Home Affairs, all the three countries should sit and

work out a trilateral agreement regarding this issue.

Foreign exchange and banking facilities should be established.

Containerized cargo should be promoted instead of non-containerized cargo to reduce

processing time at LCS

Vehicle scanners need to be installed and made functional for security check of trucks,

which is presently done by physical inspection.

Clearing and forwarding (C&F) agents/usersneed to be connected with Customs through

EDI communications.

The number of documents required for trading need to be reduced.

Marketing efforts by Bangladeshi Companies should be strengthened.

Bangladeshi companies should be encouraged to certify their products from

internationally accredited laboratories.

Management body of the LCS should sit with the laborers to fix working hour, wage rate

to avoid labor strikes.

Effective measures need to be taken by respective agencies to prevent extortion.

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ANNEX A

List of Participants

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ANNEX B

Newspaper Clippings

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